Despite the downward trend in earnings at Mongolian Mining (HKG:975) the stock rallies 11%, bringing one-year gains to 77%

The last three months have been tough on Mongolian Mining Corporation (HKG:975) shareholders, who have seen the share price decline a rather worrying 44%. But that doesn't change the reality that over twelve months the stock has done really well. In that time we've seen the stock easily surpass the market return, with a gain of 77%.

Since it's been a strong week for Mongolian Mining shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Mongolian Mining

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Over the last twelve months, Mongolian Mining actually shrank its EPS by 76%.

This means it's unlikely the market is judging the company based on earnings growth. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

Mongolian Mining's revenue actually dropped 23% over last year. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Take a more thorough look at Mongolian Mining's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Mongolian Mining shareholders have received a total shareholder return of 77% over one year. That certainly beats the loss of about 8% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Mongolian Mining better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Mongolian Mining (including 1 which can't be ignored) .

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.